Common Mistakes That Cause Traders To Fail

A common problem that many newbie traders run into is that they start trading, make some decent profits, then all of the sudden they encounter what seems to be an endless stream of losses.

Eventually they end up losing their profits and eating away at their trading capital as they struggle to try and figure out what they are doing wrong. To be successful at trading futures, you must know what the common pitfalls are and what you can do to profit in the different futures markets. Here are the most common mistakes of futures traders and what you need to do to be a good trader.


1. Not Sticking With Your System

Just when a trading strategy is starting to show promise, many traders will deviate or abandon the system that they are using. This change means that you will not be able to unemotionally evaluate the market, leading to incorrect analyses and ultimately, losses. Instead, when you start to see signs of a change in trend taking place, you should be prepared to adapt your strategy to the changing conditions. This gives you the flexibility to make consistent profits in any type of market.


2. Not Protecting Yourself

Trading involves taking a certain degree of risk, so it is important to protect yourself. There are a few ways to do this, such as using a sell or buy stops to limit your losses to a comfortable level, or by using heading strategies like buying puts. This will keep your losses to a minimum while maximizing your profits.

3. Not Staying disciplined

In order to trade successfully, your undivided attention is required to be able to read and evaluate the markets effectively , trading requires alot of time , effort and discipline. Sometimes distractions are unavoidable, but you always want to have as few distractions as possible when you are trading. This will help you to focus properly, thus increasing your odds of more profitable trades.

4. Inflexible to changes

The markets are always changing. No matter how great you think you are as a trader, there's always a new idea that can help you improve your trading results. Too often, traders get caught up in thinking that they already know enough and they aren't willing to learn anything new. As the market conditions change, this type of trader is left behind with nothing to show but losses. However, if you remain open to new ideas, you will be able to change with the markets - and profit consistently, no matter what they do.